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Oil up 3rd day on dollar slump, US crude draw data
[NEW YORK] Oil prices settled up for a third straight day on Thursday, boosted by a slipping dollar and reports that data showed a draw in crude this week at Cushing, Oklahoma, the delivery point for US crude futures.
The dollar fell to a one-month low against a basket of currencies after the Federal Reserve disappointed investors anxious for a clearer signal on a US rate hike. The euro also got a boost from hopes for a positive end to the Greek fiscal crisis.
Market intelligence firm Genscape reported a draw of about 870,000 barrels of crude at Cushing in the week to Tuesday, according to market sources who saw the data. Between Friday and Tuesday alone, some 1.2 million barrels were drawn.
On Wednesday, the US Energy Information Administration (EIA) also cited the first weekly build in Cushing inventories since mid-April.
Oil still ended off the day's highs, pressured by lingering doubts about demand a day after US government data suggested the recent strength in crude consumption may not hold. "The highs for the day had a lot to do with the weaker dollar but we have pared since," Chris Jarvis, analyst at Caprock Risk Management in Frederick, Maryland, said, citing profit-taking.
A weaker dollar makes commodities priced in the greenback, such as oil, more affordable to users of other currencies.
Brent crude settled up 39 cents at US$64.26 a barrel, off 70 cents from the day's high.
US crude futures closed up 53 cents at US$60.45.
Gasoline, which dominated action on the oil complex the past two weeks, rose 0.4 per cent to US$2.1087 per gallon. On Wednesday, gasoline fell more than 1 per cent after the EIA reported higher gasoline stockpiles for last week.
Gasoline demand across the northern hemisphere has been strong lately, with profit margins for refiners near 10-year highs.
Some doubt the oil market rally could continue indefinitely on just the strength of motor fuel. "The market keeps reverting to the mean, which is US$60," Scott Shelton, oils broker with ICAP in Durham, North Carolina, said, referring to Thursday's close in US crude. "It's fine if gasoline is going to be the big driver of global oil in the long term but unfortunately, it's not. It's just near-term flows or noise that it's creating," Mr Shelton said.